Too big for a Post-it note: 3M close to acquiring Ceradyne for $860M | The American Ceramic Society

Too big for a Post-it note: 3M close to acquiring Ceradyne for $860M

The big business news this morning in the ceramics world is that 3M has made a friendly offer to buy Ceradyne Inc. with the blessing of the latter’s board of directors. 3M apparently likes what it sees in Ceradyne and is offering $35 per share for the publicly traded company, a nice premium compared to recent stock prices that have been in the $25 dollar range. The 3M offer is valued at $860 million ($670 million net after options, acquired debt, etc.) and good for about two weeks.

A joint news release from the companies notes that the actual acquisition will be made by 3M’s Industrial and Transportation Business subsidiary, and Ceradyne will fall under that subsidiary’s Energy and Advanced Materials Division.

Ceradyne is probably best known for its production of ceramic armor plates used in many defense applications. However, the company in recent years has diversified and leveraged its expertise to enter into other markets such as transportation, electronics, medical, nuclear, solar and oil and gas applications. Research and manufacturing facilities can be found in the US, Germany, China and Canada. Just last year, Ceradyne was described as one of the top five companies in the aerospace and defense industry.

In the joint release, 3M Industrial and Transportation Business Executive Vice President Chris Holmes says, “Ceradyne is an excellent complement to our existing businesses in transportation, energy markets and defense. By joining 3M, Ceradyne associates will have the opportunity to use the power of 3M’s global reach, culture of commercializing new products and operational discipline to accelerate this platform in serving our customers with highly valued solutions.”

Ceradyne’s founder and CEO, Joel Moskowitz, was trained as a ceramic engineer at Alfred University. Later, Moskowitz earned an MBA degree at the University of Southern California. Armed with this engineering and business training, plus lots of moxie, Moskowitz launched Ceradyne with only his life savings and a telephone in a bedroom.

Moskowitz sounds happy about the deal. He says in the release, “This is a great fit and I know that advanced ceramics technologies have a tremendous future within 3M and can contribute to the development of unique solutions for many demanding applications.”

I may have a couple of opportunities to learn more about the purchase in week. Moskowitz is going to be honored next Monday night as a Distinguished Life Member of ACerS at the Society’s Annual Meeting that takes place in conjunction with the upcoming MS&T’12 meeting in Pittsburgh, Pa. Coincidentally, the other event where the topic of the acquisition may come up is the MS&T’12 plenary session Monday morning, where Terry P. Smith, technical director of 3M’s Corporate Research Materials Laboratory will be speaking on the topic, “Strategies for Materials Science Innovation at 3M.”

For more information about Ceradyne, here is some of our past coverage, including an interview I did with Moskowitz a few years ago:

Video interview:  Joel Moskowitz on Ceradyne’s armor roots, new market opportunities and surviving the economy

Ceradyne leader Joel Moskowitz opens up on acquisitions, ceramics business

Ceradyne acquires interest in Graphite Machining Services and Innovations

Ceradyne’s ESK Ceramics acquires interest in Chemtrix B.V.

Webcast of Ceradyne Inc. presentation at Cowen and Company’s 33rd Annual Aerospace/Defense Conference available

Ceradyne opens solar materials manufacturing facility in China